Mansion Global
The U.S. dollar has depreciated between 10% and 15% the past year compared to other major currencies By Portia Crowe |
Save
What makes a property purchase a good deal?
For some prospective buyers, there is value simply in finding the right home, in the right location, at the right time. Most investors, however, weigh a variety of monetary and economic factors and how they might affect price. Those might include the local tax landscape, any recent corrections in the housing market, the fundamentals of the broader economy, and, of course, the currency.
Right now, the U.S. dollar is cheaper compared to major currencies from its most important foreign buyer markets. Over the last 12 months, it has fallen more than 16% compared to the Mexican peso, nearly 16% compared to the Australian dollar, roughly 12% versus the Canadian dollar, and 9% compared to the Euro, British pound and Chinese yuan, according to figures compiled by the Dow
Mansion Global
A depreciating dollar could go a lot further today than this time next year By Portia Crowe |
Save
spooh / Getty Images
If you’re a U.S. investor, you may have noticed your spending power slipping in recent months.
In fact, the dollar has been depreciating in value ever since a March peak. So far it’s fallen roughly 10%, but there is a popular view that its devaluation will continue into next year and beyond.
In a recent note, financial services firm UBS predicted “broad-based dollar weakness in 2021,” due to elevated budget and trade deficits, a recovering global economy (meaning people are less likely to treat U.S. dollars as a safe haven), and the Federal Reserve’s decision to cut rates, “thereby negating the dollar’s interest rate advantage over the rest of the world.”